Massachusetts progressives may dream of stopping climate change by subsidizing clean-energy companies like Evergreen Solar and promoting affordable housing by requiring developers to rent or sell some units at below-market rates. In Texas, George P. Mitchell did much to achieve both those ends in far different ways — by bringing natural gas out of the ground and building a new city. Mitchell died recently at age 94. But his life reminds us that entrepreneurs, when properly nudged and supported by public policy, provide our best chance of solving tough social problems.
Mitchell’s father was a Greek immigrant who ran a dry cleaning business in Galveston, and Mitchell inherited that enterprising streak. As a kid, he caught fish and sold them to Houston tourists who could claim those catches as their own. After graduating first in his class from Texas A&M and serving as an Army engineer in World War II, Mitchell started wildcatting.
The postwar natural gas boom was Mitchell’s first taste of doing good while trying to do well. In the 1940s, more than four-fifths of the homes in cities like Chicago and Pittsburgh were heated directly by coal. Those furnaces befouled the air. In 1940, St. Louis began requiring cleaner heating. Other cities followed, but critics feared the new rules would make ordinary life unaffordable.
Instead, the air got cleaner without breaking budgets because entrepreneurs like Mitchell generated a huge natural gas boom. Between 1940 and 1950, the share of Pittsburgh residents heating their homes with natural gas increased from 17 to 66 percent, while total US production of natural gas rose by 130 percent. Over his lifetime, Mitchell himself helped develop over 10,000 natural gas wells, and those wells helped keep America’s cities both warm and clean.
The next big chapter in Mitchell’s life occurred when he diversified into real estate, buying about 75,000 acres of timber land about 30 miles north of Houston. He dreamed of building a satellite city, and a $50 million loan guarantee from HUD made that possible. With the help of the visionary, environmentally oriented planner Ian McHarg, Mitchell built an edge city called The Woodlands that is both pleasant and affordable.
There is enduring irony in the fact that red-state Texas does much better at providing affordable housing than blue-state Massachusetts. The secret of Texas’ success lies in the unfettered building activities of people like Mitchell. Housing prices will stay close to construction costs if it is easy enough to build.
Starting from nothing 40 years ago, Mitchell’s town now has about 100,000 residents and over 37,000 housing units. During the last decade, The Woodlands’ housing stock has increased by over 16,000 units. Over the same decade, the housing stock in all of Massachusetts’ Middlesex County — population 1.5 million — grew by fewer than 36,000 units. Is it a surprise that housing costs 61 percent more in Middlesex County?
Mitchell is most famous, though, for his pioneering work in fracking — squeezing natural gas out of shale. Drillers have been injecting liquids into wells since the 1860s, and Halliburton patented a process in 1949. Steep gas prices during the 1970s raised interest in unconventional sources, and in 1978 the Department of Energy supported Mitchell’s experiments using massive hydraulic fracturing to extract gas from the tight rocks of Limestone County, Texas.
In 1981, only Mitchell saw promise in the hard rock of the Barnett Shale formation. Over the next 16 years, he invested $250 million in the field and earned little return. Finally, in 1997, with an innovative combination of horizontal drilling and slick-water fracking, the gas started coming. Mitchell had proven the viability of these techniques, and of the Barnett Shale as an energy source. Others rapidly followed. Today, Barnett produces over 30 percent of Texas’ natural gas output.
New supply means that gas prices have fallen and production has risen, and more gas has meant less coal. This switch from coal to gas has significantly reduced America’s carbon emissions. Climate change remains a real threat, and high energy prices remain painful, but Mitchell did as much as anyone to address both problems.
Mitchell’s successes still hint at some role for government: Fracking needs careful safeguards; his enterprises benefited from bans on dirty coal, a large HUD loan guarantee, and public support for research. Yet ultimately, Mitchell’s achievements remind us that a Texas entrepreneur, who supplied greener fuels and abundant housing, can do as much as anyone to solve America’s environmental and economic problems.
Edward L. Glaeser, a Harvard economist, is director of the Rappaport Institute for Greater Boston.